In 1996, Laboratory Corporation of America, the largest clinical testing laboratory in the world, paid $182 million in a settlement following a qui tam lawsuit brought by Getnick & Getnick on behalf of a North Carolina doctor. The lawsuit alleged that LabCorp had included unnecessary blood tests in standard packages of routine tests. LabCorp marketed the packages of tests to doctors at prices that were often lower than the price for a single test as an incentive to doctors to order the package when a single test may have sufficed. However, when the packages were billed to Medicare and Medicaid, LabCorp “unbundled” them and charged separately for each test, many of which were neither needed nor wanted and had not been ordered by the doctor. Since the doctors never saw the bills that were sent to the government and other third party payors, they were unaware of the inflated charges, which were often more than eight times the price that the lab charged the doctor.
Getnick & Getnick LLP’s client received a $9 million share of the recovery. See:
- “Major Clinical Lab To Pay $187 Million to Resolve False Claims Act Charge. Unit Pleads Guilty To Fraud,” Corporate Crime Report, Vol. 10, No. 45, November 25, 1996.
- “Doctor Aims to Help Fellow Whistleblowers,” American Medical News, Vol. 42, No. 10, March 8, 1999. “
- It’s A Physician’s Duty To Expose Fraud If He Suspects It,” Medical Economics, September 20, 1999.